Understanding Finance and Budgeting Concepts

What is the primary purpose of a budget?

• To track past expenses

• To plan future income and expenses

• To calculate taxes

• To determine credit scores

Which of the following is an example of a debit transaction?

• Receiving a loan

• Paying for groceries with a debit card

• Earning interest on savings

• Receiving a paycheck

What is the main difference between a debit and a credit card?

• Debit cards are used for online purchases only

• Credit cards require a PIN for every transaction

• Debit cards withdraw money directly from a bank account

• Credit cards do not have spending limits

Which of the following is a key aspect of professionalism?

• Casual attire

• Punctuality

• Personal opinions

• Informal language

Which of the following is considered a liability?

• Savings account

• Mortgage loan

• Stock investment

• Real estate property

What is the primary purpose of taxes?

• To fund government services

• To increase personal savings

• To reduce inflation

• To control population growth

Which of the following is a benefit of maintaining a good credit score?

• Higher interest rates on loans

• Easier approval for credit cards

• Increased tax liabilities

• More frequent bank fees

What is the term for the amount of money borrowed in a loan?

• Interest

• Principal

• Dividend

• Equity

Which of the following is a fixed expense?

• Utility bills

• Groceries

• Rent

• Entertainment

What is the main advantage of using a credit card responsibly?

• Accumulating debt

• Building a positive credit history

• Avoiding all interest charges

• Unlimited spending